Canada's Getting Richer. Most Canadians Aren't.

Canada's Conservative government has long made sound economic management the centerpiece of its claim to office. Now, with the country's outlook showing mixed signals and a federal election coming next year, I'm looking at ways to measure the health of the economy, and what each says about Canada's.

The last installment looked at the state of the labor market, and explained how raw numbers are probably the least useful metric. But in deciding whether a government has delivered good jobs, people's ability to find work is only half the story. The other half is how much money they're making.

When the Conservatives took office in 2006, the median family income was $47,600. In 2011, the latest year for which Statistics Canada has released figures, it was $47,700. (Both figures are in 2011 dollars.)

In other words, at the end of Stephen Harper's first six years as prime minister, a household in the middle of the income distribution was pulling in $100 more than it did when he took office. In fact, 2011 median income was $1,600 lower than at its pre-recession peak in 2008.

Things have looked a little better for those at the top of the income distribution. In 2006, adjusted market income for the highest-earning 20 percent of Canadian families was $104,000; by 2011, that had increased 5 percent, to $109,200.

The change was less sunny for the bottom quintile of families, who saw their adjusted market income fall 6 percent over the same period, to $8,300 from $8,800.

Another important indicator on income is the share of Canadians earning the minimum wage. In a healthy economy, that share would be steady, or even falling. Instead, the portion of workers getting the adult minimum wage last year was 6.7 percent, a 50 percent jump over the level when the Conservatives took office.

One could argue that an increase in minimum-wage workers was to be expected during the recession. Indeed, the share started rising in 2009. But four years later, the portion of minimum-wage workers doesn't seem to be falling back to pre-recession levels.

As incomes stagnated, the cost of living rose, pushing households deeper into debt. In 2006, Canadian households had debt equal to 135 percent of their nominal disposable income, a figure roughly equal to U.S. households and about one-fifth lower than in the U.K.

By 2012, household debt had jumped to 165 percent of disposable income in Canada, while it fell to 111 percent in the U.S. and 152 percent in the U.K. In fact, of the countries for which the Organization for Economic Cooperation and Development reports these data for that year, Canada's household debt levels were the highest for 2012, the latest for which figures are available.

Unsurprisingly, much of that increase came from larger mortgages, as housing costs have rocketed up and Canadians borrow more to pay those costs. Mortgage debt as a share of nominal disposable income rose from 82 percent in 2006 to 105 percent in 2012. In effect, Canada switched places with the U.S., where those figures moved in the opposite direction.

The government responded to those pressures in 2012, shrinking the maximum mortgage period for government-insured loans and reducing what people can borrow against their homes; the next election campaign is a good time to debate whether those steps were enough, and whether they came too late.

(Christopher Flavelle is a member of Bloomberg View's editorial board. Follow him on Twitter at @cflav. This post is adapted from an article published in the April edition of the Literary Review of Canada.)

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

Christopher Flavelle writes editorials on domestic policy, including health care, energy and environment, education and retirement. He was a senior policy analyst for Bloomberg Government and chief speechwriter for the leader of Canada's Liberal Party.
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